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→ IKAR in Mass Media → #3583 IKAR in Mass MediaNitrogen fertiliser prices up in July – is there more to come? Grain market daily16 августа 2023 года Market commentary * UK feed wheat futures (Nov-23) fell £4.05/t yesterday to £191.40/t, the lowest price since 07 June. Nitrogen fertiliser prices up in July – is there more to come? Spot prices for nitrogen fertiliser rose in July, according to the latest GB fertiliser prices. UK produced ammonium nitrate (AN, 34.5% N) averaged £353/t in July for spot delivery, up £9/t from June. Meanwhile, the price for granular urea rose £46/t over the same period to £397/t. Natural gas prices rose in June as temperatures climbed (increasing the need for air conditioning) at the same time there were supply outages in Norway. There was a further increase last week due to a potential strike at the Liquified Natural Gas (LNG) plants in Australia. Europe now needs to compete for LNG cargoes to compensate for lower Russian gas imports. UK natural gas prices have eased back slightly since, but are still trading close to 90 pence per therm. This is a long way down from last year’s peaks but above the recent lows of late May and early June. Also, the EU Commission reintroduced tariffs on imports of urea and ammonia from several origins in June. The tariffs were suspended in December after prices spiked in 2022. Higher gas prices, along with the reintroduction of tariffs, a weaker pound against the US dollar, and lower Egyptian urea output, have filtered through to push up UK nitrogen fertiliser prices. Is there more to come? Forward natural gas prices are higher than current levels, partly as autumn and winter mean higher demand. European natural gas stores are filling up, but the region’s dependence on LNG will continue and gas prices remain vulnerable to further supply shocks. Natural gas makes up around 60−80% of nitrogen fertiliser production costs in Europe. So, any rise in natural gas prices is likely to filter through to UK nitrogen fertiliser prices. Another factor to watch is the sterling to US dollar exchange rate. A weaker pound against the US dollar would make all imported products dearer, including nitrogen fertiliser. More falls for phosphate and potash prices in July Meanwhile, potash and phosphate fertiliser prices continued to fall in July. The average spot price for Muriate of Potash (MOP) fell £15/t to £416/t, the lowest price since Aug-21. The average spot price for Diammonium Phosphate (DAP) fell £40/t to £519/t, the lowest price since May-21. Whether this trend continues into August or changes depends on global prices for potash and phosphate, plus the sterling to US dollar exchange rate. Global DAP prices have been picking up in recent weeks. If sustained, and sterling remains weaker against the US dollar, this could translate into higher UK prices going forward. Source: ahdb.org.uk | #grain | Comments: 0 Views: 14
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